The merger values GSK India at INR317 billion in total, or INR7,540 per share, a 15.4-per cent premium to the un-disturbed share price of INR6,531 as at close of business on March 26, 2018.
Following completion of the transaction, which is expected by the end of 2019, GSK intends to sell down its holding in HUL.
HUL chairman and CEO Sanjiv Mehta said with the strategic merger the company will be expanding its portfolio through "great brands into a new category catering to the nutritional needs of our consumers".
Similarly, GSK Plc will hold 5.7 per cent of the company, which will be monetised.
GSK announced in a statement today that it had agreed to divest Horlicks and other consumer healthcare nutrition brands to Unilever.
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In 2018, the GSK HFD portfolio delivered total turnover of €550m (£489.6m), primarily through the Horlicks and Boost brands.
HUL will also distribute GSK's over-the-counter and oral healthcare products like Crocin and Sensodyne for a period of five years as part of a preliminary move into the pharmaceuticals space.
The average growth rate has been double digit over the last decade. Horlicks, a malted milk hot drink, was introduced to India in the 1930s and has since become an "everyday staple" in South Asian households.
Merger will make HUL's food and refreshment business 1.6x larger and give it a strong nutrition brand which can be leveraged in more categories Raises FY21 earnings estimates by 6.5 percent Maintains neutral, lifts PT to 1,900 rupees from 1,770 rupees. Unilever is well positioned to further develop the market given the extent of its reach and capabilities.
"There may be significant redundancies in the areas of marketing and distribution due to this merger", remarked Arvind Singhal, CMD, Technopak Advisors.
The deal entails multiple transactions. "The transaction is subject to the satisfaction or waiver of the conditions precedents in the SPA (including necessary regulatory formalities and approval in accordance with the laws of Bangladesh)".